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Mapletree Commercial Trust - Maybank Kim Eng 2021-10-28: Placed For Recovery

MAPLETREE COMMERCIAL TRUST (SGX:N2IU) | SGinvestors.io MAPLETREE COMMERCIAL TRUST (SGX:N2IU)

Mapletree Commercial Trust - Placed For Recovery


Slower 2Q, stronger 2H22

  • Mapletree Commercial Trust (SGX:N2IU)’s revenue/NPI rose 1.1% y-o-y/0.4% y-o-y in 2Q22, but was lower at 3.7% q-o-q/4.1% q-o-q. The results were in line to consensus’ and our estimates, and with 1H22 revenue/NPI/DPU at 47% of our FY22E, we have kept our forecasts unchanged.
  • We see a stronger 2H22, underpinned by rising office demand, and improvement in VivoCity’s operating metrics alongside a gradual reopening. Mapletree Commercial Trust's valuations are undemanding at 4.5% dividend yield, with better DPU visibility from its MBC assets, and added traction from VivoCity’s recovery into the coming quarters.
  • We maintain our forecasts and S$2.35 DDM-based target price (COE: 5.9%, 2.0%) for Mapletree Commercial Trust.


Better occupancies, strong office demand

  • The stronger y-o-y performance in 1H22, with revenue and NPI up 11.5% y-o-y and 10.7% y-o-y, was from lower rental rebates (~S$18m versus S$40.5m for FY21) and the compensation received from a lease pre-termination at mTower.
  • Mapletree Commercial Trust's portfolio occupancy climbed to 93.3% (from 92.6% in 1Q22) with improvements across all its assets, except Mapletree Anson (from 99.2% to 93.9%), but its committed occupancy is higher at 97.0%.
  • Against strong demand tailwinds, its remaining FY22 office/business park leases (10.3%) were de-risked, with rental reversion at +1.5% (from +0.4% in 2H21).


VivoCity’s reversion at +3.5%, flattish outlook

  • Revenue/NPI at VivoCity fell 20.5% h-o-h/22.7% h-o-h in 1H22, but it was up 2.6% q-o-q/4.0% q-o-q in 2Q22, on the back of higher behind Frasers Centrepoint Trust (SGX:J69U) (with tenant sales at 93-98%).
  • Retail rental reversion at +3.5% (from -9.6% in 2H21) was helped by the new Dyson lease (at a high single-digit). We think reversions will likely be flattish in 2H22, with upside risk from further easing in capacities.


Sound balance sheet, more resilient AUM






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-10-28
SGX Stock Analyst Report BUY MAINTAIN BUY 2.350 SAME 2.350



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